Better Health Care Isn’t Charity. It’s Cheaper.

Earlier this year, the Healthcare Financial Management Association published its 2026 Revenue Cycle Benchmark Report. Based on a survey of 102 healthcare leaders, the report put claim denials at the top of the list of revenue-cycle challenges facing hospitals, alongside staffing shortages and audit exposure.[1]

There is something worth noticing here.

The people whose job is to manage hospital revenue are not talking about patient experience or compassion or whether the American healthcare system is nice enough. They are talking about money.

I have been wondering for some time who makes the most money when patients actually win.

Forget awareness months and corporate mission statements for a moment. What happens financially when a cancer patient gets the right care at the right time, without an insurer delaying it, a pharmacy benefit manager distorting it or a billing department turning treatment into a second disease?

Quite a few people benefit.

Employers keep workers healthier and productive. Physicians spend more time practicing medicine. Hospitals spend less money chasing payment. Pharmaceutical manufacturers spend less money navigating access barriers. Even insurers can avoid paying for complications that become more expensive when care is delayed.

There is a moral case for treating people properly, obviously.

But there is also a spreadsheet sitting underneath it.

We Are Spending a Fortune Fighting the System We Already Paid For

Consider what we already spend on the alternative.

The American Hospital Association estimates that hospitals spent nearly $18 billion in 2025 overturning insurance denials and $43 billion trying to collect payments insurers owed for care already delivered.[2]

Pause there for a moment because healthcare numbers have a habit of becoming wallpaper.

The hospital already treated the patient.

The doctors already doctored. The nurses already nursed. Somebody used the MRI machine. Somebody administered the medication. Somebody changed the sheets. The care happened.

And then hospitals spent $43 billion trying to get paid for it.

Meanwhile, a Health Affairs study estimated that drug utilization management costs the healthcare system at least $93.3 billion annually. That includes the machinery surrounding prior authorization, formulary restrictions, step therapy, cost sharing and the various ways payers, manufacturers, physicians and patients respond to those barriers.[3]

The interesting part is where the money goes.

The researchers estimated that payers spend about $6 billion administering drug utilization management. Manufacturers spend nearly $25 billion responding to it through administrative support and patient-assistance programs. Physicians absorb nearly $27 billion in time dealing with it. Patients account for another $35.8 billion through drug cost sharing after available assistance.[3]

Everybody gets a bill.

We tend to file these numbers under healthcare dysfunction, which makes them sound almost accidental. Yet complexity has economic beneficiaries. A delay creates paperwork. Paperwork requires people to process it. Then come the appeals, consultants, administrative departments, technology platforms and intermediaries needed to manage a transaction that became difficult somewhere upstream.

Eventually the work required to deal with the problem becomes its own economy.

I am not suggesting everyone inside that economy is sitting in a volcano lair stroking a cat and plotting how to make your colonoscopy more administratively challenging.

Most people are solving the problem immediately in front of them.

But incentives do not need a Bond villain.

They just need to pay.

Everybody Is Paying for a Different Version of the Same Problem

Patients pay the most obvious price, but hardly the only one.

Pharmaceutical manufacturers have spent decades watching pharmacy benefit managers insert themselves between drugmakers and patients. In a 2025 investigation of the 3 largest PBMs, the Federal Trade Commission found that vertically integrated PBMs marked up numerous specialty generic drugs by hundreds or thousands of percent at their affiliated pharmacies, including medications used to treat cancer and HIV. The FTC calculated more than $7.3 billion in dispensing revenue above estimated acquisition costs for the drugs it studied between 2017 and 2022.[4]

Nobody needs to mistake pharmaceutical companies for charitable organizations to recognize that PBM extraction gives manufacturers a financial interest in greater transparency.

Employers have their own version of the problem. They pay for health benefits, then pay when workers cannot get timely care, then lose working hours while employees fight with insurance companies, track down approvals, appeal denials or try to figure out why the medication their doctor prescribed has suddenly entered witness protection.

Physicians pay in time.

The American Medical Association’s 2025 survey found that practices complete an average of 40 prior authorizations per physician every week. Physicians and their staff spend about 13 hours a week completing them. Forty percent of surveyed physicians said they employ staff whose entire job is prior authorization.[5]

Somehow we have normalized paying doctors to argue with insurance companies about whether they should be allowed to doctor.

And the patient?

The patient may be sitting at home wondering whether the scan is approved.

That is the part economic discussions about healthcare can accidentally erase. “Administrative burden” sounds antiseptic when you are not the person waiting for treatment. “Utilization management” sounds almost elegant until the thing being utilized is the drug keeping you alive.

A patient does not experience these systems as market inefficiencies.

They experience Tuesday.

The phone call. The hold music. The portal message. The prescription that is still not ready. The specialist saying they are waiting on insurance. The employer wondering why they disappeared for 2 hours. The creeping suspicion that perhaps they filled something out incorrectly even though none of this was supposed to be their job in the first place.

Look at enough of these costs together and the usual political categories become less useful.

Employers lose money. Hospitals lose money. Physicians lose time. Manufacturers surrender revenue to intermediaries. Patients lose money, time and sometimes access to care. Even insurers can spend more when delayed care produces preventable complications that are considerably more expensive later.

Meanwhile, certain businesses make money precisely because healthcare transactions remain difficult to understand, approve or complete.

That is not a conspiracy theory.

It is an incentive map.

The Economics of Patient Protection

This is where the politics get interesting.

Patient protection is routinely treated as an argument between compassion and markets, as though making healthcare work better for sick people requires everybody else to accept an economic sacrifice.

Much of what patients want is considerably more boring than that.

They want transactions that work.

They want prices they can understand. They want an insurance product that behaves roughly like the insurance product they thought they purchased. They want the treatment their doctor ordered to arrive without requiring a minor in administrative law. They want to know who is making a decision about their care and why.

Prior authorization reform and meaningful transparency are patient protections, but they are also the kinds of things functioning markets ought to require anyway.

The moral argument has been available for decades. Elisabeth Rosenthal has documented healthcare’s incentives as both a physician and journalist. Atul Gawande spent a career showing what evidence, systems and incentives reveal about the way medicine actually works.

The trouble with morality as a reform strategy is that institutions can admire it sincerely while continuing to respond to their financial incentives.

Economics suggests a different possibility.

Employers have reason to fight administrative waste. Pharmaceutical companies have reason to challenge PBM opacity. Hospitals have $43 billion worth of reasons to care about payment friction. Physicians have 13 hours a week worth of reasons to dislike authorization bureaucracy.

They do not have to agree on everything wrong with American healthcare.

They do not even have to like one another.

They only have to notice where they are being charged for different versions of the same problem.

That distinction matters because healthcare reform conversations have traditionally organized themselves around sectors. Patients over here. Employers over there. Doctors. Hospitals. Pharma. Insurers. Government. Everybody arrives with their trade association, policy agenda, lobbyists, consultants and acronym collection.

But administrative friction does not respect those boundaries.

The cost just changes hands.

Patients Have Something Nobody Else Has

Patients are the obvious connective tissue.

Cancer survivors, people with chronic illnesses, the uninsured and underinsured, families carrying medical debt, caregivers and the millions of Americans who have been delayed, denied, overbilled or simply exhausted by healthcare constitute an enormous population without a comparable political identity.

That is one of the central ideas behind We the Patients: healthcare has organized nearly everyone around patients more effectively than patients have ever organized themselves.

Hospitals have associations. Physicians have associations. Insurers have associations. Pharmaceutical companies have associations. Employers have associations.

Patients have diagnoses.

We have breast cancer organizations and diabetes organizations and rare disease organizations and heart disease organizations and hundreds of extraordinary communities built around specific illnesses and experiences.

What we have never really built at comparable scale is a constituency around the experience underneath all of them.

Being a patient.

The NRA did not become politically influential because every gun owner agreed about everything. It organized people around a shared interest and taught politicians that ignoring that constituency carried consequences.

Patients have never done that at anything approaching the same scale.

And the economic argument may give that constituency some unexpected company.

An employer does not need to become a patient-rights organization to object to paying for unnecessary administrative friction. A physician does not need to become an activist to want those 13 hours back. A manufacturer does not need a sudden moral awakening to prefer a market with less opaque extraction between its product and the patient.

Interests can overlap without becoming identical.

That may be considerably more useful than waiting for everyone to agree.

For generations, patients have made the compassionate case for better healthcare. We have told our stories, testified about suffering and asked institutions to understand what their policies do to actual human beings.

We should keep doing that.

But perhaps we have been leaving one of our better arguments sitting unused in the accounting department.

Better healthcare does not require choosing compassion over capitalism. There is plenty of money already disappearing into avoidable denials, unnecessary administration, prior authorization and the machinery required to manage all three.

The question is whether American healthcare continues rewarding that friction or finally discovers there is money to be made by removing some of it.

Patients have spent a very long time showing the system our scars.

It may be time to show it the spreadsheet.